Liquidity providers deposit funds into Merkle Trade and receive trading fees from traders (supply-side fees).

Merkle Trade is a non-custodial perpetual exchange protocol built on Aptos.

MKL tokenholders own and govern the protocol. They do currently take a cut of the total trading fees paid by traders (revenue). Merkle Trade's investors include Arrington Capital, Hashed, etc.

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Merkle Trade

# Merkle Trade Fees Methodology

## 1. Overview

The Merkle Trade fees metric measures the total fees generated by the Merkle Trade protocol on Aptos blockchain. This includes both fee distributions to various stakeholders (liquidity providers, stakers, and developers) and rebates paid to users through the referral system. The metric provides a comprehensive view of protocol fee activity by combining these two fee streams and converting them to USD for standardized reporting.

## 2. Data sources

- **Aptos blockchain event logs**: Parsed `FeeDistributor_DepositFeeEvent_event` events that capture fee distributions to liquidity providers, stakers, and developers
- **Aptos blockchain event logs**: Parsed `Referral_RebateEvent_event` events that track rebate payments through the referral system
- **End-of-day price feeds**: Token price data used for USD conversion of fee amounts
- **Token metadata**: Decimal precision information for proper token amount calculations

All fee transactions occur in lzUSDC (LayerZero USDC) token with address `0xf22bede237a07e121b56d91a491eb7bcdfd1f5907926a9e58338f964a01b17fa::asset::USDC` on the Aptos blockchain.

## 3. Step-by-step calculation

### Component A: Fee distributions
- **Purpose**: Captures fees distributed to different protocol stakeholders including liquidity providers, stakers, and developers
- **Logic**: Extracts `FeeDistributor_DepositFeeEvent_event` events from Aptos blockchain event logs. Each event contains three fee components: `lp_amount` for liquidity provider rewards, `stake_amount` for staking rewards, and `dev_amount` for development team fees. The model sums these three components to calculate total fee distributions. All amounts are cast to high-precision numeric format to handle large token amounts accurately. Data is grouped by day, chain identifier, and token address.
- **Key fields**: `lp_amount` (liquidity provider fees), `stake_amount` (staking fees), `dev_amount` (developer fees), `block_timestamp` (event timing), `token_address` (always lzUSDC)

### Component B: Rebates
- **Purpose**: Captures rebate payments made to users through the referral system
- **Logic**: Extracts `Referral_RebateEvent_event` events from Aptos blockchain event logs. Each event contains a `rebate` amount representing fees returned to users who participated in the referral program. Rebate amounts are cast to high-precision numeric format and aggregated by day, chain identifier, and token address. These rebates represent additional fee activity that should be included in the total fees metric.
- **Key fields**: `amount` (rebate amount paid to users), `block_timestamp` (event timing), `token_address` (always lzUSDC)

### Final aggregation
- **Combining components**: Fee distributions and rebates are combined using a union operation, creating a single dataset of all fee-related activities. Both components are aggregated daily and summed to produce total daily fees for each token
- **Currency conversion**: All fee amounts are converted to USD using end-of-day exchange rates. The conversion process also corrects for token decimal precision to ensure accurate dollar amounts
- **Time aggregation**: Events are aggregated by day using timestamp truncation, with all events within a 24-hour period grouped together
- **Final calculation**: The final metric value represents the sum of all fee distributions (liquidity provider fees + staking fees + developer fees) plus all rebate payments, converted to USD and aggregated by day. Any missing dates are filled with zero values to maintain consistent time series data

*This methodology was automatically generated by Token Terminal's methodology analyzer.*

Total value users pay to use a protocol (gross fees, user-paid fees).

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